Monthly Market Update: October 2021

Early in the month, Democratic and Republican Senate leaders haggled over a short-term deal to increase the debt ceiling that ultimately prevented the U.S. from reaching the brink of a payment default. It was agreed that they would raise the limit by an amount that is sufficient to tide the Treasury over until December, when Congress will have to vote again to avoid missing obligations such as the payment of federal salaries, benefits and Treasury securities. The lack of confidence in Congress’s ability to reach an agreement at the beginning of the month briefly impacted U.S market performance but once a path forward was created, equities rebounded. 

Many equity indices recorded new highs during the course of the later part of the month. U.S. stocks benefited from a strong earnings season, with more than 80% of companies beating earnings expectations, driving the S&P 500 to a new peak. Chinese indices also reported positive momentum, as the challenged property sector that we mentioned in our previous monthly update showed signs of recovery.

Supply chain constraint, and the impact it is having on inflation both in the short and long term, continues to make headlines around the world. As the inoculation rate in many countries  improves, investors are now focused on what the post Covid-19 world will look like if inflation does continue to rise. In saying this, the level of pent-up demand, solid balance sheets and capital available for deployment should mitigate the possibility of stagflation. 

The impact of worker shortages also continues to be felt around the U.S despite the end of more generous additional unemployment benefits. It was expected that as these welfare payments ended, workers would return; however, the labor force declined last month and participation rates remain below their pre-pandemic peak. Those that are back at work are enjoying wages that are 5.5% higher than this time last year, and those that are available to work are being snapped up by employers with the unemployment rate falling to 4.8%.  

Fixed income markets didn’t enjoy the same positivity as equity markets over the month largely due to supply chain constraints and prolonged inflationary concerns. Booming energy prices have caused markets to price in a faster pace of tightening from central banks than previously indicated. The 10-year U.S. Treasury yield reached 1.7%, with large increases in shorter-dated yields. October was a weak month for high yields, with the index experiencing its first monthly total return loss in 2021. Among sectors, Energy led the gains, benefiting from higher oil prices, while Cable & Media lagged. 

Demand for ​​investment-grade fixed income from institutional investors is expected to remain strong going forward as they have high levels of cash that needs to be invested. If the market behaves in a similar way to the previous period of tapering bond purchases, then bond holders might be glad to hold. If rates rise as a result of tapering, the extra income could be an opportunity for investors to diversify their portfolios with meaningful high quality fixed income exposure.

Real estate

All eyes have been on Zillow Group Inc., an American online real estate marketplace company, over the last couple of weeks following the release of their disappointing Q3 results fueled by their failed Zillow Homes business. Zillow entered the business in late 2019 with hopes of using its popular marketplace site and massive data sets to profit from buying and selling homes in high volumes. However, it had begun listing homes for less than it had paid for them, with approximately two-thirds of Zillow Homes listings underwater according to KeyBanc Capital Markets. Zillow was only able to sell 3K of the 10K homes that they purchased during Q3, leaving them with a large inventory that forced them to reevaluate the business model and shut it down completely. The Zillow story is forcing investors to consider whether algorithms will ever reinvent the way that real estate is transacted. 

Art

The recent Frieze week sales in London, which are anchored around the acclaimed Frieze Art Fair, signaled a return to pre-Covid bidding energy within live salerooms. Christie’s and Sotheby’s, the two biggest global auction houses, had combined contemporary art evening sales during this Frieze week that generated $178M, 30% above their combined pre-sale estimates, and 20% above their combined sales in October 2019, the last ‘Frieze Week’ sales prior to the global shutdown.1

1. Athena Art Finance.

How helpful is this content?

Share this article:

Sign up for Yieldstreet in 3 easy steps

Sign up with your email address

Securely verify your identity and link a bank account

Verify your accreditation (if applicable) to access all of Yieldstreet’s offerings.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.0B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest" or "Annualized Return" represents an annual target rate of interest or annualized target return and "term" represents the estimated term of the investment. Such target interest or target returns and estimated term are projections of the interest or returns and or term and may ultimately not be achieved. Actual interest or returns and term may be materially different from such projections. This targeted interest or returns and estimated term are based on the underlying investments held by the applicable.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 The Fund will cease investing and seek to liquidate the Fund's remaining portfolio no later than 48 months after the Fund's initial closing. It may take up to twelve months thereafter to fully monetize any remaining illiquid investments in the Fund's portfolio.

6 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

7 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including Nov 15th, 2021, after deduction of management fees and all other expenses charged to investments.

8 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Prism Fund before investing. The prospectus for the Yieldstreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetprismfund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

300 Park Avenue 15th Floor, New York, NY 10022

844-943-5378

No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

Banking services are provided by Evolve Bank & Trust, Member FDIC.

Investment advisory services are provided by YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure
Copyright © 2021 YieldStreet, Inc.